Robert Gardner: If you leave your children one thing, make it this | Robert Gardner | TEDxWandsworth

I've got an idea I want to share, which is my experience but I think it will help others, and it begins here, in Argentina, in 1985. That is me. And I still have those shorts. So, my idea is this: The financial responsibility and teaching our children financial literacy is as important as ever. And growing up in Argentina was a tough country; we just moved there from the UK. My mom and dad were teachers earning a salary in pesos, the local currency, which proved to be challenging. But it was this challenging experience that meant my sister and I learnt an invaluable lesson and experience about money which I'd love to share with all of you. The first of it was how to earn it. So at the time Argentina was a poor country - there were an almost non-existent middle class. My sister and I had no pocket money, and yet every day I'd come home from school with a few pesos in my pocket. How did I do it? At lunchtime, I'd wait for the older boys and girls to finish drinking their Coca-Cola bottles and Fanta bottles, and just before the school bell rang, I'd go over and collect them all up because I knew if I took them back to the shopkeeper, giving him those bottles, he'd give me just a few pesos. And that was my first lesson: how to earn it. The truth is, there are opportunities everywhere to earn money, we just need to spot them and work hard for them. So I think and I believe that financial responsibility and financial literacy is as important as maths, and we need to start teaching our children now. So once we've figured out how to earn money, many of us struggle how to keep it, and my experience of keeping it was born out of my experience in Argentina. So at the time the economy was really struggling. What this meant was that prices were going up every single day. Prices were going up 30% a month. But my sister and I experienced it in a different way because at the end of the month, on payday, my mom and dad would round us up and drive to the supermarket, and we'd play what we would call 'Argentinian supermarket sweep'. Because my mom would give me and my sister a shopping list - we'd have to run round the supermarket as quickly as possible to get hold of all the goods we needed before the prices went up that day. When we got home that night, and we'd done all the shopping we needed for the month, my dad would meet up with his best friend and drive to a black market dealer to exchange those pesos for dollars because if we didn't, we risked losing all of our money to the ravages of inflation. I still remember my dad saying to me, 'Rob, Argentina isn't a country where you fall asleep on your money, because if you wake up, it might not be there.' That experience has stuck with me forever. And there was my second lesson: how to keep it. I believe we need to teach all of our children how to keep hold of our money because the truth is, there are things outside of our control working against us to take away our money. But I wasn't to learn the magic of the third lesson until a decade later. I was lucky, I got a job working in a bureau de change in the south of France. And it was with this experience I was fortunate enough to get a job here in the city, advising companies on how to manage their foreign exchange risks. Just a few years later, I graduated to advising those same companies on how to look after their pension funds, and here, I learnt that magical skill: how to grow it. What people call in the city 'compound interest'. Albert Einstein supposedly called compound interest the eighth wonder of the world. And said this: 'He who understands it, earns it. He who doesn't, pays it.' Think about it. Do you understand compound interest? Are you earning it? Or maybe you don't, and maybe you're paying it. More importantly, what about your children? Wouldn't you want your children to learn about the eighth wonder of the world, compound interest - how to grow money, how to make money from money? So it was with this experience of growing up in Argentina that my sister and I learn how to earn it, how to keep it, and how to grow it. But how many of us got any financial education at school? And the reason why I think it's so important right now is that because without these skills, we have a real problem. Just a few months ago, the UK government announced that there are 25 million adults in the UK who are financially vulnerable. That's probably some of us in this room. And let me really spell out what financially vulnerable means. Seventeen million of us adults don't have 100 pounds in savings. Which means one overdue bill, a broken down washing machine, pushes us over into debt. Four million of us are one month away from bankruptcy. This problem is compounded further because it turns out that money is a taboo subject, and we don't like talking about it. And parents would rather talk to their children about sex than about money. So if financial education is so important, why have we been so bad at it? I have three reasons. The first is when we do teach it, we make it too boring and too Victorian. The second reason is it's just too complicated, or we make it too complicated. And the third reason is we don't start early enough. So a few years ago, at a charity we founded called RedSTART, which teaches children financial literacy, we thought, how can we go about designing a game that gives those children the experience, the emotions of earning money, of keeping money? We even get them to lose some money, and crucially, the magic of growing their money. And I wanted to share what that experience looked like, I wanted to share with you Money Matters. So all of the children are given 500 pounds, and they've got to play this game. And there are opportunities everywhere. There's a station called Fighting Fit, where literally they get down and do 20 press-ups, or a few star jumps, and just like that, they can earn money. Because that's the first lesson: the ability to spot how to earn money and learn that through hard work they can earn more money. But my favourite game is when I get a call from Rich Ricky; bear with me. 'Yep, yep.' Good news! Rich Ricky has an offer to make to all of you. He has promised that if you invest with him right now, he will double your money by the end of the game. At this point, loads of kids' hands go up. But this is a trap. We are scamming your children. Rich Ricky is a scam. Yes, you heard me - we are deliberately scamming your children. A bit later he calls back: investments have been going really, really well. In fact, he needs more money, and he needs it now. Who wants to double their money by the end of the game? Something magical happens: conversation starts. Can we trust Rich Ricky? Who is Rich Ricky? One wise boy comes up to me and says, 'Is it a Ponzi scheme?' (Laughter) Sadly for that poor boy, the lure of doubling his money was too much, and just a bit later, he comes to me really excited, and he pulls me down, and he says, 'Rob, I figured out how to win the game', and he gives me all of his money to Rich Ricky. Sadly, I get another call. It's Rich Ricky again, the investments haven't gone so well. He's not coming back. All the money is gone. The kids are devastated. That poor boy is on the verge of tears. And yet, I promise you, he learnt the most valuable lesson that day: the ability to spot a too-good-to-be-true scam. And the reason why this is important is every single day, including today, we lose two million pounds to financial scams and fraud. Wouldn't you rather we taught your kids the experience of Rich Ricky, rather than waiting until they graduate from school, or university, and meet a real-life Rich Ricky? But the magical station is one called Built to Last, and here the children, if they spot it, have the opportunity to invest 50 pounds to play. And the game is simple: you build a tower out of blocks of wood - the taller the tower, the more interest you earn. Now, you have two strategies: one strategy is to build a really tall tower and earn lots and lots of interest. Another strategy is to play it safe, build a smaller tower, collect the interest, and go again, earning interest on your interest. What do you think the kids do? I wonder, what would you do? Well, most of the kids fall for the trap of building the taller tower because just as you go to put that brick on top, you risk knocking down all the blocks of wood and losing everything. Because actually building smaller towers is easier, it's less risky. And once you start to build on top of each other, you start to learn this magic feeling of growing your money, of earning interest. And crucially, the more you practice, the better you get. So we've played Money Matters now with over 500 pupils, and the results are fascinating. Over half of the children end up with less money than they started. A handful of them, like that poor boy I mentioned earlier, end up losing almost all their money. And yet, every time we have a handful of winners, and we've had 20 to 30 pupils who've more than doubled their money to get a thousand pounds. How did they do it? Turns out that these young boys and girls, they're not Richard Branson, and we had taught them the rules to the game. They experienced it, they learnt it, they watched other boys and girls losing money to Rich Ricky, putting money in the bank, playing Built to Last, building a tall tower, and figuring out that that doesn't work when there's enough time in the game to figure out the rules of the game. Now, wouldn't you want your children to know the rules of the game, to feel confident about managing their money? Well, I'm a dad, and I have two young daughters. And this is me playing Built to Last with my three-and-half-year-old daughter. Now, just a week ago, we had some friends over, and they bought her a cupcake. And it made me very proud because about halfway through she stopped eating her cupcake, and she said, 'Daddy, I've had enough. I want to keep it till later.' Now, delayed gratification is a foundational habit to financial responsibility and financial literacy. And we can start at a young age. But my contention is this: Let's not wait for the government to put financial education on the school syllabus. Let's start having a conversation with our children now about money. Let's start finding fun and engaging ways to allow our children to experience how to earn it, how to keep it, and how to grow it. Because it turns out I was very lucky growing up in Argentina because I got to experience things that most people don't, and I had parents who taught me about budgeting and saving. Because it turns out we learn our money saving habits by the age of seven. So I dare you to take action and have a conversation with a child or a grandchild because I promise you, this will have an impact that will compound forever. Thank you. (Applause)